Gold prices hit their lowest in over a week on Tuesday, as a lull in geopolitical tensions spurred a pick-up in investor appetite for riskier assets such as equities. Spot gold dipped 0.1 percent to $1,325.11 an ounce by 0615 GMT, after earlier touching its lowest since Sept. 1 at $1,322.85. The metal fell 1.4 percent in the previous session, its biggest one-day percentage decline since early July.
US gold futures for December delivery were down 0.4 percent at $1,330.40. "The lack of an expected North Korean missile launch, and expectations that Hurricane Irma will have less of an impact than previously anticipated led to a rekindling of 'risk-on' sentiment," said John Sharma, economist at National Australia Bank.
Irma, earlier ranked as one of the most powerful Atlantic hurricanes on record, was downgraded to a tropical storm on Monday after wreaking havoc across Florida. Spot gold may drop to $1,317 per ounce, as it has broken support at $1,332, said Reuters technical analyst Wang Tao. "We suspect that the dollar rally could have more room to run ... we could see a retracement in the precious metal to around $1,310-$1,315 before an element of underlying support sets in," INTL FCStone analyst Edward Meir said in a note.
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